Wow, great discussion! I want to bring up one potential issue that I think hasn't been mentioned before, that may impact the design (if we cannot solve it in the pyxform implementation).
On the XForm side, there is a subtle difference between using <setvalue> with the odk-instance-first-load event and the current defaults (default values in instance) wrt to repeats. If a new repeat is created the current default (value in instance) would populate the default value. With dynamic defaults it wouldn't if the odk-instance-first-load event would be used (because it happens after form loading). I'm thinking introducing a new repeat-creation event with pyxform coding magic may resolve that (CommCare has jr-insert).